The Government Shutdown of 2011?
Democrats are betting that this is 1995 redux, with President Obama threatening to shut down the federal government rather than accept $61 billion in Republican spending cuts out of a $3.7 trillion budget. The president’s advisers no doubt recall the 1995 conflict with new Republican Speaker Newt Gingrich that resulted in an upsurge in President Clinton’s popularity, supplanting memory of 1994’s unpopular HillaryCare health care reform effort with a populist vision of heartless, budget slashing “Dole-Gingrich” Republicans, thereby setting the stage for Clinton’s easy reelection in 1996.
What if both parties are reliving the wrong year? Economic growth in 1995 was only 2.5 percent, due to a Federal Reserve engineered “soft landing” from the prior year’s torrid pace, but unlike today the economy was ticking along near full employment: only a 5.6 percent jobless rate. But what about the enormous deficit Gingrich and Clinton were fighting over? Again, not much of a parallel: In 1995, federal red ink totaled $164 billion, exactly one-tenth President Obama’s planned 2012 shortfall of $1.65 trillion.
President Obama is institutionalizing the “stimulus”—supposedly a one-off $862 billion splurge on “shovel ready” projects, but actually a payoff to assorted liberal constituencies. He is borrowing money at a record pace, not to finance a war or meet some other national security emergency but to sustain his political priorities. All of Obama’s deficit spending will need to be paid by our children and grandchildren, permanently damaging their future prospects. House Budget Committee Chairman Paul Ryan (R-WI) framed the stakes during an interview on Mark Levin’s radio program on Monday:
I asked the CBO for these numbers, I know them off the top of my head. My kids are 6, 7 and 9 years old... by the time my kids are my age -- I'm 41 -- I asked the CBO, "What will the future tax rates have to be if we don't get this debt under control?" And this was before the current budget, which makes it worse.
They said the lowest tax bracket, now at 10%, goes to 25%. Middle income tax brackets go to 66%. And the top bracket goes to 88%. We've had those numbers run.
Look, the CBO -- their own economic model breaks down in 2037. Because the computer at the Congressional Budget Office basically says [it] can't conceive of the economy continuing past 2037 because of the strangulation of debt. Because of the debt burden.
So they think the economy crashes well before my kids are even raising their own kids.
Is it moral to hamstring future generations this way, for this purpose? Let’s look again at recent events: turmoil in the Mideast, rising fuel and food prices, stagnant job-creation, and a federal government with its boot on the private sector’s neck. It sure feels more like 1979 than 1995 to me.
Isn’t another federal government shutdown a moral imperative?
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Re: The Government Shutdown of 2011?
The Paul Ryan quote excerpted above tells you everything you need to know about why this man will be a force to reckon with for a long time to come. Not only does he have the intellectual fortitude to analyze the nation's most serious economic issues with clarity and precision, but he also has the talent to lay these problems bare in a way that will shake the American people from their slumbers. If the GOP is going to push the White House on this, Ryan needs to be front and center as the designated spokesman.
Oct '10
Re: The Government Shutdown of 2011?
At the risk of sounding naive or shortsighted, my advice to the GOP is to go all in on reducing the budget. Political extinction is a risk in the short term, but not doing so guarantees political extinction in the long term. Arguments that axe wielding will bring on a 2012 Democratic landslide and, thus, make matters worse ignore reality. The trend of ever growing entitlement is downpayment on a permanent dependent majority. After 55+% are bought and paid for, there will be no GOP to lead a destitute country anyway. What is the alternative to absolute opposition to this President? A timid effort to prolong our demise? For God's sake, the President just announced that the one-time stimulus was really an enormous shift of baseline budgeting in favor of his base. If something isn't done soon, then we'll lose a signficant portion of our productive population. Not that I'd mind him leaving, but do you think George Soros intends to hang around until the debts come due? Well, there will be plenty of others that we would like to keep sailing with him.
Dec '10
Re: The Government Shutdown of 2011?
I don't believe that President Obama has the intestinal fortitude to stand up to the GOP. He talks big, but he was unable to do anything about ending the Bush tax cuts, even when he still had his huge majorities in the House and Senate. It's way easier to bluff when you haven't already shown a tendency to fold.
Rep. Ryan shows an excellent line of attack that can help protect the GOP from voter backlash: if we don't do anything, our children will be picking rags and rummaging through garbage to survive the coming economic collapse.
Re: The Government Shutdown of 2011?
It is almost universally acknowledged that President Obama's budget is a travesty -- a refusal to face up to the fiscal crisis and a cynical repudiation of his responsibilities as President. Congress should not limit its cuts to $61 billion, which is a pittance. It should vote for a step-by-step, gradual return over the next four years to the pre-Obama budget of 2008 -- with a single exception: national defense. That would be a start.
Obama is betting that, if the Republicans propose serious budget cuts and he vetoes them, he will win. I would take that bet. There has never been a moment when the American people were more alert to the danger posed by the deficit. Call his bluff, say I. If he threatens a government shutdown, call his bluff. Pass continuing resolution after continuing resolution setting the budget at the proper level, and let him use his veto. His party will line up with him and march off the cliff once again. His audacity in this matter is our opportunity.
May '10
Re: The Government Shutdown of 2011?
Paul Rahe shows once again why he is...the man! Well said, Professor...would that this view of our nation's plight were more plentiful in our profession.
Dec '10
Re: The Government Shutdown of 2011?
What accounts for the difference between the 2008 spending numbers and today's? If congress has refused to pass an actual budget since Obama got elected, then the spending baseline should be the 2008 number and the difference should be comprised of the emergency appropriations and the stimulus. Have all government agencies so quickly adjusted to (read become addicted to) emergency and stimulus funding? Have they grown so accustomed to this amount of money that it would cause chaos to simply reset their budgets to the real baseline?
Dec '10
Re: The Government Shutdown of 2011?
Well, there is no need for me to make an economic comment, as the original post and the omments, thereafter, summed up the economics.
So I will make a political comment. I didn;t like Newt Gingrich then and do not like him now. The same is probably true for most American voters. I like John Boehner; he may not be my political ideal as a Speaker, but I like him. I'll bet that, once numbers start really fleshing out amongst likely voters, John Boehner is liked by most Americans.
I never liked Bill Clinton, but could understand both his appeal to liberals, and his appeal to careless Americans that enjoyed his personality. I do not know a single person that likes Barak Obama, and that includes devout Obama supporters. My fiancee is an Obama supporter, so there is that insight, but, through her, I know many other of his supporters. I'm telling you, they don't actually like him. He's an icon, more than a reality.
If I could buy a future bet, on a pay-per-view match between Boehner and Obama, not on media reaction, but likely voter popularity, I think Boehner would win.
Dec '10
Re: The Government Shutdown of 2011?
No, no -- President Loman is liked, but he's not well-liked.
Re: The Government Shutdown of 2011?
CJ, I think you're on to something important here. Clinton really ran away with the '95 showdown after Gingrich fulminated in public about the shutdown being payback for his being relegated to the back of Air Force One. Needless to say, this was not Newt's finest hour.
In contrast, I note that Boehner is taking a low-profile, even declining to attend the recent state dinner for Premier Hu. Smart man.
Edited on Feb 16, 2011 at 6:24pm